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Progress & challenges: Shale gas

Progress & challenges: Shale gas

The U.S. Geological Survey (USGS) last week sharply raised its
assessments for the Marcellus and Utica shale formations, estimating they hold
a mean of 214 trillion cubic feet (Tcf) of undiscovered, technically
recoverable natural gas resources — with the Utica now topping the Marcellus.

That’s
according to the Natural Gas Intelligence website (naturalgasintel.com).

“The
new assessment is a significant increase from the last time USGS updated the
figures. In 2011, the Marcellus was estimated to contain 84 Tcf and in 2012 it
estimated that the Utica contained 38 Tcf.

Reporter
Jamison Cocklin reminds that the formations are massive and underlie parts of Kentucky,
Maryland, New York, Ohio, Pennsylvania, Virginia and West Virginia.

“The
Utica also extends into Canada but the areas assessed include only the states.
The formations have been most fruitful in Ohio, Pennsylvania and West Virginia,
where producers have pushed natural gas production to record levels,” Cocklin
adds.

While
it indeed is encouraging news for the long-term viability of the industry, it
comes with continuing challenges, for the industry and public policy makers.

The
industry is in the middle of a shakeout, what with a glut of product and low
prices. And too many public policy makers still are wont to tax into oblivion a
proverbial goose that looks to deliver golden eggs for a very long time.

That
said, it behooves public policy makers to adequately identify and consider
ancillary policy issues that come with an industry obviously here to stay.

There
are the evergreen road issues, from wear and tear to oversized vehicles.

There
are potential environmental issues, from standard, commonsense regulations to
what might the state attorney general’s criminal investigation of the industry
bring, if anything.

Then
there’s perhaps the least talked about effect – the delivery and utilization of social services by what
oftentimes is a transient populace.

And
how might local jurisdictions best accommodate those “downstream” businesses
and industries to come with the advent of two regional “cracker” plants?

Thus,
these are, concomitantly, the headiest and most challenging times in the shale
gas industry. How everyone works together, or works apart, will make all
the difference.

Meanwhile,
in the public policy world of mass transit, New York City Mayor Bill de Blasio’s “War on Economic
and Social Inequality” has backfired. As if that wasn’t totally predictable.

To wit, the
New York Post reminds that the mayor was touting his heavily subsidized ferry
service as a way to level the playing field for workers of lesser means.

But the Big
Apple’s own Economic Development Corporation, which manages the service,
concluded that, as per usual, the best-laid plans of government interventionists
seldom have the results they tout.

It turns out
the handsomely subsidized ferry patrons — $9.34 per rider — are
“overwhelmingly white, wealthy and come from waterfront neighborhoods,” the
newspaper reports.

Which makes
one wonder about the demographics of those heavily subsidized Port Authority of
Allegheny County “T” trips that run through some of Pittsburgh’s tonier South
Hills communities.

Colin
McNickle is communications and marketing director at the Allegheny Institute
for Public Policy (cmcnickle@alleghenyinstitute.org).